European shares slump as coronavirus fears worsen

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FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 24, 2020. REUTERS/Staff

(Reuters) – European shares dropped sharply in early trading on Monday as growing concerns over the potential economic damage from a fast-spreading coronavirus sapped demand for riskier assets.

Death toll from the outbreak in China rose to 81 and the virus spread to more than 10 countries including France, Japan and the United States. Some health experts questioned whether China can contain the epidemic.

The pan-European STOXX 600 declined 1.5% by 0808 GMT after hitting a record high in the previous session.

Shares of mining firms .SXPP slumped 3.1%, dragged down by their exposure to China, and fell the most among all the major European subsectors that were trading in the red.

France’s CAC .FCHI lagged regional bourses as luxury goods makers such as LVMH (LVMH.PA), Hermes (HRMS.PA) and Gucci owner Kering (PRTP.PA), which are heavily reliant on Chinese demand, fell between 2% and 3%.

Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta

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